Barry FitzGerald: what’s next for vanadium play Tando as the boom metal soars

Date: Nov 8, 2018

There is no shortage of ASX-listed vanadium stocks for investors wanting exposure to what has been the “boom’’ metal of the last couple of years.

Vanadium’s (spot) price run from as little $US3/lb in 2016 to $US33.90 recently has been nothing short of spectacular.

The adoption of new and higher strength steel “rebar” (reinforced bar) specifications in China to prevent buildings collapsing during earthquakes and floods, and the emerging demand from the vanadium redox flow batteries  (VRFBs) sector, have been behind the price rise.

But the metal’s strong performance has not been enough to protect the 40-odd ASX juniors that have vanadium in their portfolio. The best performed in response to vanadium’s price run up this year have given much of their gains back.

It is not that the vanadium thematic of increased use in China, and strong growth in the uptake of VRFBs in the stationary market for storage of renewable energy, has run its course.

It’s just that the vanadium sector got sold off with all other mining sectors in the October stock market rout.

Some caution on vanadium’s price performance is also at play.

The metal has a volatile history. Supporters of the vanadium thematic argue that this time around, things are different thanks to China’s new steel standards, which came in to effect last week, and the rise of VRFBs.

But like the rest of the junior sector, the recovery of buying support for the vanadium stocks is proving elusive, notwithstanding the 13-year highs in the vanadium price.

(Stockhead published a comprehensive guide on vanadium and the ASX-listed players by Angela East on October 29).

The best shot the vanadium stocks have in the near-term to get a bit of buzz back in to their stories is to roll out a positive news event and hope that there is a re-rating of their share price in response.

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